Drugmaker Lupin has formalised an $ 880 million (over Rs 5600 crore) acquisition of New Jersey based firm Gavis, executing in the process the big-ticket deal that company management has been referring to over the last two months.

This is tipped among the biggest buys in the overseas markets by an Indian drug company, surpassing Dr Reddy’s $ 572 million buy of Betapharma in Germany and Sun’s $ 454 million buy of Israeli drugmaker Taro.

Lupin Managing Director Nilesh Gupta had recently told Business Line that the spotlight was clearly on an acquisition this year. And last month, the estimated Rs 12,600 crore Lupin received a thumbs up from its board of directors to raise up to Rs 7,500 crore, possibly with an eye on acquisitions.

Indicating a big acquisition on the cards, of specialty products or companies in the US or Europe, Lupin has in the last two months already snapped up a company in Brazil, marking its entry into the market.

Gavis, a privately held company, specializes in developing and marketing niche pharmaceutical products in a variety of dosage forms. The acquisition gives Lupin a booster in the US generic market and broadens its pipeline in dermatology, controlled substance products and other high-value and niche generics.

Also coming into Lupin’s fold will be a skilled US-based research and development organization and a manufacturing facility making it Lupin’s first manufacturing in the US.

Vinita Gupta, Lupin Chief Executive Officer said that the acquisition was pivotal as it helps the company deepen its US presence and accelerates its entry into niche areas like controlled substances and dermatology.

“Gavis has a strong track record of delivering highly differentiated products in a short time and is poised for continued strong growth as it delivers on its existing pipeline,” she said.

The acquisition is expected to be accretive to the earnings from the first full year of operations, she said, adding that the companies also had a cultural fit in terms of their entrepreneurial spirit and values.

Gavis recorded sales of $96 million in FY 2014 and has over 250 employees, Lupin said. It has 66 abbreviated new drug application filings pending approval with the US regulatory Food and Drug Administration. About 72 percent of its filings are niche dosage products, the company said.

The combined entity will have a portfolio of 101 in-market products, 164 cumulative filings pending approval and a deep pipeline of products under development for the US, Lupin said. When the acquisition is closed, the company’s ANDA filings will address a $ US 63.8 billion market, it added.

jyothi.datta@thehindu.co.in

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